Kiffmeister’s #Fintech Daily Digest (05/12/2021)*

SEC Staff Calls Bitcoin ‘Highly Speculative,’ Hints at ETF Skepticism

The U.S. Securities and Exchange Commission (SEC) hinted that bitcoin’s price volatility may mean it’s not yet ready to support an exchange-traded fund (ETF). The note called bitcoin is a “highly speculative” asset, and warned that investors in mutual funds that trade bitcoin futures may be taking on more risk than they’re aware of. Going forward, SEC staff will “consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs.” 

China’s Much-Hyped Digital Yuan Fails to Impress Early Users

Shenzhen digital yuan trial participants interviewed by Bloomberg showed little interest in switching from AliPay or TenPay, some balking at the possibility a digital yuan might give authorities easier access to real-time data on their financial lives. Some merchants may also be wary of their transactions flowing directly into a government database to help police tax collection compliance. The People’s Bank of China has tried to quell those concerns by making the digital yuan free to use for merchants and by pledging that most payments will remain anonymous. 

Central Bank of Bahrain, Bank ABC and J.P. Morgan announce Digital Currency Settlement Collaboration

The Central Bank of Bahrain (CBB) is collaborating with J P Morgan and Bank ABC in a pilot scheme to introduce instantaneous cross border payment solution leveraging state of the art technology and digital currency. Bank ABC and J.P. Morgan will pilot the transfer of funds from and to the Kingdom of Bahrain in US-Dollars for payments from buyers to suppliers. The CBB will act as a close partner in the pilot and going forward would look to extend the collaboration to central bank digital currencies (CBDCs). 

MoneyGram locations to let customers buy and sell bitcoin with cash

MoneyGram is working with cryptocurrency cash exchange Coinme to enable the cash funding and payout of digital currency purchases and sales. The arrangement will see MoneyGram add the Bitcoin service to around 12,000 locations starting this month. International locations will follow. 

Exploring central bank digital currencies: SWIFT and Accenture publish joint paper

A joint paper from SWIFT and Accenture looks at the CBDC opportunities and challenges for international payments, sets out practical requirements for the adoption of CBDC at scale, and outlines how SWIFT can support the financial community as new solutions are developed. SWIFT is planning a host of trials over the next few months to test how its platform could interact with the cross-border use of CBDCs. 

Retail Central Bank Digital Currency (CBDC) Technical Platform Criteria

In a new blog post, I take a deep dive into the central bank digital currency (CBDC) technology platform decision, broadly speaking breaking the options down into those with centralized or decentralized ledger architectures, and ledger-less stored value platforms. I also tabulate what I believe to be the main players in the retail CBDC platform space. I’m open to comments and suggestions, especially if I’ve missed any, but please provide links to written material that supports them. 

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